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tv   Key Capitol Hill Hearings  CSPAN  October 10, 2013 12:00pm-2:01pm EDT

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seniors hundreds of dollars a year on prescription drugs, and is leveling the playing field when it comes to providing health care and putting consumers back in charge of their own health care. madam president, i want to make this clear. after having legally passed both houses of congress, being affirmed by the supreme court and then serving as a referendum in the just concluded campaign that overwhelmingly reelected president obama, the affordable care act is settled law. let me say that again. the affordable care act is settled law. but describing it as settled law alone i know isn't enough to resolve this latest crisis. i'd like to take viewers and my colleagues back a decade when the presiding officer was a member of the house at that time as well, when george w. bush, president george w. bush pushed
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us to pass what was an unpaid for prescription drug benefit. my members, the caucus in the house felt this unpaid law was thrust upon us without due consideration and at that time when we shouldn't be racking up further debt. many of us on my side of the aisle were literally reeling with anger after it passed. it also passed in ways with which we disagreed, in the middle of the night literally. the desk in the house was kept open for four hours in order to find those votes. i was angry, i voted against that prescription drug benefit. i was as angry as some of my colleagues were when the affordable care act passed over three years ago. so what i wha* did i do? i -- what did i do? i took a deep breath.
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listened to counsel of people i respect, listened to my own counsel. i decided to start town halls and listening sessions so i could help my constituents sign up for it. i knew it was the law of the land, like obamacare is today, and i wanted my constituents to be best served by its implementation. i went out and spread the word about the benefits, figured out what questions my constituents would have. i wanted them to sign up. i want to make it a success. i wanted them to have those benefits. so let's fast forward to today. far from helping people, our friends and colleagues on the other side of the aisle have relentlessly spread uncertainty about obamacare. attacked its implementation at every turn and now have closed down the federal government over their concerns about it. we're in the tenth day of a government shutdown. our national security is
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suffering. 70% of the intelligence community is furloughed. we don't have enough food inspectors on the job. our veterans are not getting the services not only that they need, but they've earned. our national parks are closed. i mentioned estes park. estes park is the gateway to rocky mountain national park. heestes park is going to recover from these devastated tphraog. rocky -- from these devastating floods. rocky mountain has to be open for business. this isn't the way we should be doing business. the affordable care act is far from perfect. no manmade law is. was every law, it will undoubtedly need some improvements and some constructive changes during its implementation, and i'm committed to doing that, just like we did after president bush moved his prescription drug law to the finish line.
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in the past few days we've seen statements indicating that some republicans are starting to understand that this partisan focus on obamacare is futile. so as their next step, they've seized on yet another destructive tactic: manufacturing a new crisis, an even more serious, potentially devastating crisis in shutting down the government. what have they done? they are threatening the full faith and credit of the federal government to push their budget demands. they've threatened to force us pass the deadline, which is october 17. that is a week from today, when the united states will no longer are able to meet its financial obligations. grand standing in front of the government is bad enough, madam president, but if we don't agree on a way forward to reopen the government but we also don't
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agree on a way to ensure that the treasury department doesn't default on our nation's debt obligations, we will seriously damage global confidence in the united states. make no mistake. there are some voices in this building who think that that won't happen. they are wrong. if we damage the global confidence of the united states we will hamper economic recovery, slow job creation, make borrowing more difficult for government and families alike. this is no way to win the global economic race in which we find ourselves. coloradoans are telling me in kwraefr way they can that they expect a lot better than this. ronald reagan used to joke in only the way that he could that he wasn't worried about the debt. it's big enough to take care of itself. but every american should worry if congress refuses to meet the obligations we've already made. now i know many americans are
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worried about our debt and our capacity to pay the bills we've incurred. i've been worried about this for a long time. and i think if you'd ask anybody around here, they'd tell you that i'd vote in a minute for a sensible grand bargain. it's true. i worked across the aisle and built a record of efforts to reduce wasteful spending and set our budget or a more sustain able future. it should be one of our top priorities. it has to be one of our top priorities. i've been a long time supporter of the line-item veto. i supported the initial structure around which the simpson-bowles deficit reduction worked. i called for an end to earmarks. i worked with senator coburn from oklahoma on ending some wasteful public subsidies, including those for the political party conventions every four years. it's why i was the first democrat to champion a balanced budget amendment to the u.s. constitution in many a year.
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i'm not the only member as well, madam president, of my party that's been fighting for commonsense reforms. this is critically important work. i would love nothing more than to bring a serious deficit-reduction plan to the floor and pass it along with raising our debt limit to avoid an american default. but let me be crystal clear. to default on our debt because a grand bargain eleads us would make -- eludes us would make our debt and deficit even worse and thrust us into an economic tailspin. it is irresponsible to even suggest forcing america into default as a legitimate negotiating position. let's sit down and have a grown-up discussion about these important issues, but not like this. let's fund the government. let's pay our bills and then let's sit down and negotiate again. negotiation is good. compromise is good.
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but we cannot have this important set of discussions with one party constantly threatening to shut down the government or throw our country into default, each of which makes our deficits and debt even worse. we've got literally centuries of examples of congress collaborating and working together. and we've done that for over 200 years. we can debate. we can have contentious back and forth. but in the end, we need to compromise and agree. we need a comprehensive and balanced tk*ubgs -- deficit-reduction plan that can pass both chambers and be passed into law. madam president, no party gets to threaten the american economy and shut down the government when they don't get their way. no party gets to jeopardize middle-class families' 401(k)s or senior citizens' retirement savings or set our economic recovery back just because their
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positions aren't strong enough to prevail on their own. that just isn't the way to address our nation's shared problems. and trust me, our debt and deficits are a shared problem. we can do better. madam president, i want to begin to conclude by again referring to the coloradoans i'm so fortunate to represent, just like the presiding officer, i know, is honored to represent the good people of wisconsin. coloradoans have shown the true strength of our state in the wake of this tragic flooding that literally has wiped communities off the map and destroyed thousands of homes. if we could have done anything to prevent that natural disaster, we would have. we now face a potential man-made disaster. we've got to protect americans from a looming man-made disaster
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that's emerging right here. we've got to bridge the partisan divide. we have to end this government shutdown. we have to stave off an american default. we have to pay our bills. we could do this today if speaker boehner would allow the house to vote on a clean funding resolution that we've already sent to the house, with the house numbers in it, by the way. so let's just see a vote in the house. the continuing resolution would pass the house today with republican and democratic votes. so let's just vote. let's hold a vote. the presiding officer and i served in the house, and when we were eager to go to work, we would shout "vote, vote, vote. work, work, work." it's time for the house to go to work. let's vote to end this debt ceiling crisis and make sure our nation pays the debts it's already incurred. these are the basic functions of congress.
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if we fail to act, history will never forgive us, any of us. madam president, i yield the floor. a senator: madam president? madam president? the presiding officer: the senator from colorado. mr. udall: i have four unanimous consent requests for committees to meet today during today's session of the senate. they have the approval of the majority and minority leaders. i'd ask unanimous consent that these requests be agreed to and that these requests be printed in the record. the presiding officer: without objection. mr. udall: madam president, i yield the floor. a senator: madam president? the presiding officer: the senator from idaho.
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mr. crapo: thank you, madam president. i rise today to discuss the multiple issues that have now presented themselves to us here in the senate and to the united states congress and, frankly, the american people. i've been in several hearings this morning. the first was with secretary of treasury jack lew, where the finance committee discussed with him the pending expiration of our debt ceiling and what his understanding is of how that will impact the country. he raised a lot of serious concerns, very legitimate serious concerns that others are raising. we then followed that up with a hearing in the banking committee where we had representatives from a number of the various industries in the united states also discussing what is going to happen in the united states if the country does not increase the debt ceiling. and there are serious consequences that will happen if
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we don't do this. but what i tried to do in both of those hearings -- and i'll refer to my conversation with secretary lew -- was to focus us back on the broader, bigger threat. secretary lew basically said that we have a manufactured crisis here in the united states because of our unwillingness at this point to face the debt ceiling and simply extend the debt ceiling without any kinds of conditions or negotiations. and i reminded that i am the crisis we face is the -- the big crisis we face is the debt crisis. and it's very real. and i guess in a sense it has been manufactured over the last 20 or 30 years by congresses and presidents who have refused to control spending and have put us into tremendous debt. our debt ceiling that we are negotiating about right now, or
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i think wishing we could negotiate about now is $16.7 trillion. it's grown by trillions of dollars over the last five or six years. and what the president has asked us to do is to once again increase the debt ceiling by another $1 trillion or more with no reforms, no fiscal changes in our policies to deal with the mounting spending crisis that we face. the president's position is you give me this trillion dollars or more of new debt authority, and i will then talk to you about reforming our fiscal policy. the problem is that we've been trying to negotiate over fiscal policy now and trying to get reforms put into place for years. and we have not been able to get there. when i asked secretary lew about
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this, he basically said we've made progress on our overall debt crisis in the past few years, and i think that we can continue to work on those kinds of steps if you will simply pass this clean debt ceiling and do so in a way that involves no negotiations from the president in any way. i reminded him that a major part of the progress that we have made in the last couple of years was made when we met the debt ceiling two years ago, in 2011. and it wasĂș -- it was the budget control act that put into statute over $2 trillion of reductions in our spending path, and that was attached to the debt ceiling as we moved forward. and it was literally a debt ceiling negotiation that generated the only significant spending controls that this congress and that this country
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has seen for years and years. and yet the president refuses to take another step now that we have met the debt ceiling again and negotiate for further reforms. by the way, there is another reason that we have made some progress in the past few years, and that is that we have implemented massive new taxes on the american people. the obamacare legislation itself contains nearly a trillion dollars of new taxes, and they are now, although they were delayed for a few years, they are now beginning to fully hit the american people. and last january, the president was able to win his argument and succeed in getting the top income tax brackets raised. an impact on our tax code that i think was harmful rather than helpful and clearly was damaging to the creation of jobs and to businesses across the united states, but nevertheless another $500 billion to $600 billion of
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tax revenue was put into the mix there. so what woo very done? we've made a plan to control discretionary spending over the next ten years and reduce it by about $2 trillion. if we stick to that, we'll get $2 trillion worth of spending reductions. we have raised taxes by at least $1.6 trillion over the next ten years, all of which i believe has been harmful to our economy but has generated revenue to try to help reduce the debt cycle. but we have not addressed the two critical parts of reform that we must address in this country if we are ever to get control of our spending excesses and stop the out-of-control spiral toward insolvency that we see, and that is reforming our entitlement system and reforming our broken tax code. what have we seen there? virtually minimal, if any at
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all, reforms of entitlements. they seem to be off the table, yet they are the part of our spending problem that is the biggest and the most out of control. and on tax reform, we've seen no reform of the tax code. we have a tax code that is the most unfair, the most complicated, the most expensive to comply with and the most anticompetitive code we probably could have created if we did it on purpose, and yet we have no reforms of the code and instead what we have done is add to the code another $1.6 trillion of new taxes on the american people. and what we are asking is whether we can move forward in trying to deal with our fiscal problems in this country by negotiating over entitlement reform and tax reform. and i frankly believe that we
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ought to be at the negotiating table talking about that, but what we have been told is no, as soon as you will raise the debt ceiling by the amount that we are hearing somewhere in the neighborhood of a trillion dollars, as soon as you will raise the debt ceiling, then we can talk further about other negotiations. then we can get engaged on trying to deal with our debt crisis. i pointed out, as i said, to secretary lew that the last major progress we made on spending reform happened in negotiations relating to our debt ceiling. why can't we negotiate now and make significant fiscal reform in addition to dealing with our debt ceiling? it's that debt crisis that is the biggest problem. i was on the simpson-bowles commission, the president's own commission that he put together some years back, two or three years now, and we spent a full
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year studying the impacts on our economy of america's fiscal excesses and what we needed to do, and the simpson-bowles commission came up with a plan. it was a proposal. we concluded that we needed to -- and this was two or three years back, but we needed to reduce our spending path, our debts path in the united states by at least $4 trillion. we concluded that we had to deal with that by reforming our entitlement system, and we had to deal with it by controlling discretionary spending, and we agreed to having some of that tax revenue that the president was demanding, and we also agreed that in the -- in the overall mix that we would have about a 3-1 ratio of revenue to spending -- excuse me, of spending cuts to revenue. the president did not accept that recommendation.
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and many of us tried for months and months and months afterward to get that recommendation to the floor for a vote, but it has not made it to the floor for a vote. my point is negotiations have been under way for years and years and significant plans have been developed that would help us move forward. we know what to do. we need to have the will to do it. and so far the only reforms that we have been able to get in the last few years as a result of the debt crisis that we face have come when we have met these pressure points dealing with our debt ceiling. we're not asking to shut down the government for the purposes of simply making a point. we are trying to get to negotiations. we want to see the government reopened. we are not seeking to have the debt ceiling expire.
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we want to have negotiations to be able to put together the kinds of fiscal reforms that should always accompany extensions of the debt ceiling. i believe the reason that congress put statutory debt ceilings in place in the first place was because they wanted to give america a gut check every so often about the spending problems that we have. we have put almost half of the entire spending system of the government on auto pilot, and we don't even have the opportunities to vote on it here in congress. madam president, ultimately we have to deal with the debt ceiling and ultimately we have to deal with the funding to keep our government operational. let's not just move forward and accomplish those objectives. leaving in place the unrestrained fiscal crisis that we are dealing with in this country.
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let's use this opportunity to put together the kinds of fiscal reforms that should accompany decisions to allow our country to increase its debt. and with that, madam president, i yield my time. madam president, i note the intelligence intelligence. the presiding officer: the clerk will call the roll. mr. crapo: madam president, i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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the presiding officer: the republican whip. mr. cornyn: mr. president, i ask unanimous consent that the quorum call be rescinded. the presiding officer: without objection. mr. cornyn: madam president, yesterday i came to the floor with the distinguished majority leader to raise the issue of survivor benefits to those who died in the line of duty, reportedly 26 service members have died since the government shutdown on october the 1st, including five in combat, and they've been denied the basic
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survivor benefits, their families have, which include a death gratuity, $100,000 of life insurance, a housing allowance for a year paid in a lump sum, as well as burial and other related expenses. yesterday i asked unanimous consent that we take up and pass the house bill and the majority leader and i entered into a conversation and there was a question of whether the intervening action by the -- by the department of defense to try to work around the lapse of the funding. and fischer house, which is just a wonderful charitable organization, they -- they help operate and fund seven different facilities in my state alone -- and i know they're extraordinarily generous and they do very good work -- they offered to enter into a contractual agreement with the department of defense to meet -- to fill the gap during the interim. but what i'd like to do is ask unanimous consent that we take up and pass the house legislation, which would
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alleviate the need for fischer house and the department of defense trying to figure a work-around. we'd actually pass legislation that would reopen that stream of funding so that these families can get the benefits they deserve. so i would ask unanimous consent that the senate proceed to consideration of calendar number 216, h.j. res. 91, making continuing appropriations for survivor benefits for survivors of diseetioned mill -- deceased military members for fiscal year 2014, that the measure be read a third time and passed, and the meetings to reconsider be considered made and laid on the table. mr. reid: madam president? the presiding officer: is there objection? mr. reid: madam president? the presiding officer: the p.m. mr. reid: reserving the right to object. the senior senator from texas has been always very courteous to me. yesterday was no exception. in withholding his unanimous consent request when we discussed this issue. it was about 2:00 in the afternoon, as he indicated. and i indicated i thought if we
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waited until 3:30, we would have this matter resolved. that's what i had been told. and, in fact, it was a little after 3:00 yesterday afternoon, secretary hagel issued a statement announcing the department of defense had entered into an agreement, as my friend said, with the -- with the organization that my friend mentioned. and that would provide the family of fall h fallen service members -- over weekend the weekend, the senator from texas is right, we had four soldiers killed, one of whom was a woman. four men and one woman. and the agreement that the senator -- that senator hagel came up with would give everyone to provide family members who are in the military the full set of benefits they've been promised, including the $100,000 death benefit gratuity. so the death benefit issue has
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been resolved. the department of defense stepped forward and took care of everything. and so this issue is largely moot. it's clear the action on this legislation is now just for show here. we all agreed that it was a bad thing that the government shutdown led to this added grief for the families who had suffered such a terrible loss. now we need to do what we can to prevent any further bad result results -- and there have been plenty of them -- in other areas. the right thing to do is to prevent more of these in other areas, and the house should just vote and open the government. the issues have been taken care of and it's terrible that we even got to this point. but we shouldn't forget, as long as the government remains closed and the house republicans refuse to reopen the government, the military is unable to, for example, buy armor and equipment needed to prevent future deaths in the military. families of f.b.i. agents killed
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in the line of duty, same problem. they can't receive their death benefits. veterans' benefits are delayed and disrupted. so, madam president, as for this bill today, the secretary's now acted, we all agree that it's -- the issue's taken care of. but if my friend from texas feels more comfort as a result of doing this, which i think is unnecessary, i don't object. the presiding officer: without objection, so ordered. mr. cornyn: madam president, if i could just respond very briefly. i appreciate the majority leader not objecting to consideration of this legislation. he believes that this issue had been resolved by this contractual arrangement between fischer house and the department of defense, but ultimately the department of defense would have to reimburse fischer house under what i understand the reported arrangement to be mait be made. this obviates the need for any kind of work-around, together with any legal questions that
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might arise as to whether this is actually something the department has the authority to do. i'm not suggesting they don't. i'm just saying this alleviates all those considerations. so i'm glad we were able to come together in a bipartisan way, like we would on the military pay for uniformed military, and pass this narrow piece of legislation. i think maybe now that we've passed the pay for active-duty military and we've passed this provision that provides for survivor benefits for the families of the fallen, maybe that paves the way to open up for some other narrow bills until we can come together on a larger bill, as we've offered, for example, funding for n.i.h., the nationa national institutesf health. the distinguished assistant leader of -- on the democratic side gave a few days ago a very eloquent speech about children's cancer research. and under the bill that's passed by the house on a bipartisan basis that we have called up
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here, that funding would be restored. as would funding for the veterans administration so they could process disability benefits which they're not able to do now because of 9 cutoff in funding. so there's a number of areas where i think we can work together constructively if we will do. so and i'm just glad today we were able to -- able to take care of this one. mr. durbin: would the senator yield for a question? mr. cornyn cornyn: i would be go yield for the floor. or yield for a question. mr. durbin: i say through the chair, what i think we did here was the right thing to do. and i'm sorry, i'm dreadfully sorry, that -- pained, painfully sorry, that this government shutdown is hurting so many innocent people. it could come to an end with one decision by the speaker to call one bill on the floor of the house. he refuses to do it. and so we are trying to put out these little fires, spare the american people of the pain and injustice that's coming about as a result of this shutdown.
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but i -- i'd say to the senator from texas, even the veterans administration bill passed by the house fails to fund some critical areas for veterans. it does not fund the appeals process for veterans' disability claims. those have stopped. secondly, it doesn't fund the cemetery rights of veterans who are seeking to be buried in national cemeteries. so while we pay for funerals, the people who prepare the gravesites and such are not being paid. it doesn't have the department of labor program to hire unemployed veterans coming home. that's not funded. the h.u.d. program for homeless veterans is not being funded. so the notion that we are somehow taking care of veterans without house action is far from true. and the last point i'll make, over half a million federal employees are actually veterans. many of them to are furloughed today. a fourth of all the federal employee veterans are disabled. many of them are furloughed
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today. so if we really, really care about veterans, opening government to make sure all of these agencies are serving our veterans seems to me a reasonable approach. i ask the senator if he agrees. mr. cornyn: madam president, responding to the question of the distinguished assistant majority leader, i would say that we would all like to try to find some way to get back to business as usual when it comes to funding the government through the regular appropriations process. we haven't done that for a long time. and so we've been operating not only individual bills. i think there are 13 separate bills that -- as part of the appropriations process. so now we've unfortunately already degenerated to this continuing resolution process, which has got its own -- own problems. buld but i would say to my fried that for every one of the hardships that we can mitigate through passing narrow legislation absent a global agreement on the continuing resolution, it seems to me we
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ought to be doing that. and if there are other suggestions that -- that the democratic side has about how we can do, that i think that would be a good thing to do. but there are a lot of them that -- the problem, is madam president, i know the majority leader maybe -- i'll give him the benefit of the doubt. i hope he didn't really mean he thought this was a show -- a show process, prying to restore these survivor -- process, trying to restore these survivor benefits through this process. so i give him the benefit of the doubt. but i do think there's a lot of questions raised in the minds of the american people whether what's happening here is being done purely for political purposes. when you have veterans, people -- veterans of world war ii and korea who come to the worlworld war ii memorial only e bet with barricades. and i've met a number of these honor flights of the greatest generation at a number of these memorials and they're basically -- they basically decide to go around the barricades, as is their right i believe under the constitution. but it just seems like there's an effort made to maximize the
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pain associated with the shutdown. we know 83% of the government's being funded. why can't we try to chip away at some of these narrow provisions and milt gate some of the hardship while -- that we -- mitigate some of the hardship while -- that we can, rather than sort of getting in our corners and squaring off and creating more and more problems. so i think it's -- this is important. we ought to be doing this. we should have done this a long time ago. i would say to my colleagues, you know, there are reports that secretary hagel notified the administration of this lapse in survivor benefits back before the shutdown even occurred. but it took the president nine days before he finally ordered the department of defense to come up with a work-around, thankfully with the help of the fischer house. so i think there's an impression here that a lot of gamesmanship is going on. i don't think it becomes the senate. i think congress' approval rating is in the toilet and we ought to be doing everything we can to try to work together to try to address the problems
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where we can. mr. durbin: would the senator yield for a question? mr. cornyn: madam president, i'd yield the floor to the senator. the presiding officer: the assistant majority leader. mr. durbin: in response to the senator from texas, let me make a several points. first of, i was at the memorial last week with a great group of veveterans who came in from illinois. and there was no barricades, they went on to the memorial and they went. the reason why there was any question about the memorial and their access was the decision by the republicans to shut down government. i was going to remind the senator from texas who is a learned attorney and a former texas supreme court justice of a story we were told in law school. it was a story of someone who killed both his parents and then went to the courtroom and threw himself on the mercy of the court because he was an orphan. in this situation, we have our republican friends lamenting 9 impact of a government --
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lamenting the impact of a government shutdown on world war ii veterans coming to washington on these tragic stories of families that have lost someone they love in combat. all of this is unnecessary. all of it could have been avoided if the republican speaker of the house would call one bill for a vote, which he knows will pass. it would open the government. that is a simple, honest answer. this notion that we're going to have a series of small appropriations to fund our government, all of the appropriation billings that have -- all of the appropriation bills that have been called so far and passed the house amount to about 18% of the discretionary domestic budget. at this patience the house only has to pass 79 buil bills to open or government. we think at this pace it will only take them two and a half months to do it. we need to open our government, spare them the injustice and pain which comes from this republican shutdown.
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mr. reid: madam president? the presiding officer: the majority leader. mr. reid: my friend shall the distinguished senior senator from illinois, gave an example that applies to a number of things that my friend from texas said. first of all, we haven't don appropriations bills. we haven't done appropriations bills because the republicans won't let us. we can't -- we can't even get cloture on a way to proceed to one of them. and then, madam president, i want to make sure the record is clear. the president -- my friend from texas doesn't have to give me the benefit of the doubt on what i said. if there were ever an example of this whole process being for show, it's this: we have a lot of things we should be working on. the country is within a week of defaulting on its debt for the first time in the history of this country. we should be focusing on that.
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the government should be open. and we had the unfortunate incident that brought this to the attention -- we had four of our five troops killed over the weekend in afghanistan. and it brought to the attention that they were not going to get their benefit because the government mart that gives them the money is closed. we didn't close it. so secretary hagel, a former republican member of this body, worked it out so that they are all taken care. they're all taken care of. so this unanimous consent request that i agreed to isn't for show. they're all being taken care of anyway. i appreciate the senator giving me the benefit of the doubt. this whole thing is for show. this whole government shutdown is for show. the show -- i don't quite understand the ending of it, but
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that's where we are. the presiding officer: the senator from florida. mr. rubio: can i inquire under the previous how much time is remaining for the minority. the presiding officer: there's eight and a half minutes respecting for the republicans. mr. rubio: may i ask unanimous consent to add five minutes to that total for a total of 13? the presiding officer: is there objection? without objection. mr. rubio: okay. thank you, madam president. with all this focus on -- going on this washington these days, i think on the fighting that's going on in washington these day, i think we're losing focus on the big of the issue that faces our country, and that's the pervasive and growing sense that we're losing control of our country. that the -- that we're losing the american dream. why do people feel this way? well, because millions of them have been out of a job for months and maybe even years, because millions more find
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themselves stuck with jobs that don't pay enough for them to live on, or certainly for them to live like they used to. you know, when people hear the news that the economy is recovering, that unemployment is down by .1% this week or this month that the stock market is up and that the recession is over, it makes people angry. and rightfully so, because the recession might be over on wall street, but it's not over for millions of people who are out of work or stuck with jobs that do not pay enough to live off. and you know what makes all of this worse? is that while their p parks pays aren't growing, their bills are growing. ask the young americans who are saddled with thousands of dollars in student loan debt. how are people making it through? well, i'm reminded of a few years after we got married, my wife and i hit a rough patch in our finances and so are what we did is we got rid of one of the
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cars and moved in with her mom for six months. that's wham of us have had to do for one stage of our life but it was usually temporary. now people are doing that with the feeling that it might not be temporary, that this might be the way it is for a while. and they ask themselves, is this the new normal? is this the way things are going to be from now on? this is what millions of people across this country are feeling these days. that maybe the american dream that if you work harksd you can improve your life, that maybe that dpreem isn't what it used to be. that maybe the american dream is actually even slipping away. why is this happening? whose fault is this is the normal reaction that some people have. well, there are a few reasons this is happening. one is that the economy has changed, the nature of our economy has changed. globalization, for example, has sent thousands of jobs -- middle-class jobs overseas. information technology and advances have replaced many of our middle-class jobs with machines.
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another reason is we have simply too many of our people never got the education or skills they needed for the better-paying jobs that the new comoi is creating. and we can't ignore, for example, the break down of our culture and our families and what it's doing. it's trapping people in a cycle of poverty and of dependence. these are all contributors to what we face today. but one of the major reasons why this is happening, why so many people are trapped in dead-end jobs, why so many people have been unemployed for so long, one of the major reasons why is because our economy is not creating enough jobs that you can live off. and one of the reasons why that's happening is because our country is headed for a debt crisis. the real debt crisis is not the dooming debt limit. the real debt crisis is that every year our government is spending more money than it takes in. and, by the way, one day we're not going to have to worry about raising the debt limit. because no one will want to lend us money anyways.
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now, too often around here we talk about the national debt as if it's simply an accounting problem. the national debt is a lot more than that. how does the economy create good jobs in it creates good jobs in two ways. one is through innovation, when people creed a new product or service. the other is through investment, when people risk the money they have to start gnaw business or when a business reinvests its profits back into the imri busis to grow. but the fact that we arehooded for a debt crisis and have no sear yaws long-term plan in place to address it, that is discouraging innovawtion and that is discouraging indiana in. who wants to risk their money to start a new business in an economy that's headed for a catastrophic destruction? who wants to reinvest their profits to grow a impis in a country where the government is going bankrupt? having people trapped in low-paying jobs, having people unemployed for months or years a
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a time, having people unable to afford to get married or start a family, this doesn't have to be the new normal. it doesn't have to be this way for every. we can turn this around. but to do so, we have to stop chasing all these temporary gimmicks that promise us some sort simplify momentary boost to our economy. we have to stop ignoring the problems headed fowl-spee full t us. we have to return to the basics, toes basics that made us such a prosperous nation. now, our national debt today, it stands at close to $17 trillion. in the last five and a half years alone, it's grown by over $6 trillion. so when you hear the president or the democrats hear i here ine senate say they us to pass a clean debt limit contrary, here's what they're really asking for. they're asking us to borrow another $^1 trillion but not do anything meaningful to slow the growth of that debt.
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why would recontinue to do this? when are we finally going to get serious around here about putting in place a serious long-term plan to bring this debt under control? in order do that the first thing we have to understand is what's causing this debt. now, look, we have a grown tax code. it is full of all sorts of special interest loopholes. but the reason why we have this massive debt isn't because rich people aren't paying enough in taxes. you know, even if we taxed every millionaire every penny they made this year, it doesn't even make a small dent on the debt. yes, there's some serious waste going on throughout our government. for example, we have to reverse the changes that the obama administration has made to these welfare programs that basically gut the work requirement and leave people dependent on government. we need to reform the way we give foreign aid. we must and should do all of these things and even more. but even if we did all that, it's still not enough. what is driving our debt is the way we spend money on two very
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important programs: medicare and social security. they are spending more money than they take in and that gap is growing rapid lier every single year. now, i warn you, any time anyone talks about making changes to these program, you get accused of trying to hurt the elderly. for speaking for myself personally, let me set the record straivment i come from a state that has millions of people, millions of retirees that depend on these programs. one my own mother. she worked hard for her entire life and paid into these programs so they would be there for her when she retired. i would never support any changes to these programs that hurt my mother. but these programs are going bankrupt. and anyone h's a in favor of doing nothing about them is in favor of bankrupting them. and the good us? this clierng the good news is we still have time to save medicare and social security. and we still have time do these changes without making any changes to the benefits of seniors like my mom. but to do so is going to require
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younger workers like myself to accept that when we retire, our medicare and our social security is going to be different than our parents. so instead of spending all of our time around here trying to figure out how to raise the debt limit, we need to spend more of our time trying to figure out what we can do to put in place a serious long-term plan to bring this debt under control. so that our economy can start creating more of those good-paying middle-class jobs, so that people can start building for themselves the better future they always dreamed of. the american dpreem is under assault. that is the real crisis. when are we going to get serious about solving it? you know, this dream of earning a better life, it's the universal hope of people everywhere. but we're reminded that for much of human history, most people found themselves trapped by the circumstances of their birth. that meant that no matter how hard you worked, no matter how much talent you had, you're only
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going to go as far as your family went. you can dole whatever it is your parents did. but one of the things that has made america special is that here that's been different. here through hard work and sack fishings people from all walks of life, from every corner of the world, have had the real opportunity to earn for themselves a better life. this is what we call the american dream. as americans, that's our identity. it's what holds us together as a nation. it's what holds us together as a people. and that's what's made us exceptional. and so i know that people are discouraged about how tough times are. i know that some people are very disappointed about the way the last election turninged out. i know many people are angry and quite frankly disgusted by the way this process is work or failing to work these days. but no matter how bad things may seem, we cannot give up on america. and we cannot give up on the american dream. we have to do everything we can
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to make sure that this country remains a place where anyone from anywhere can accomplish anything. and so despite how ugly washington looks like right now, i actually remain confident that in the end that's exactly what we're going to do. and i have to doubt that in the end our children will grow up to be the most prosperous general rawingprosperousgeneration that. i know that despite all the challenges we face right now, when all is said and done, i believe with all my heart that we will still go down in history as the generation that saved the american dream and that left for our children what our parents left for us -- the single greatest nation in the history of the world. madam president, i yield the floor. mr. nelson: madam president? the presiding officer: the senator from florida. mr. nelson: madam president, i'm mindful of the hour, as the
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senate is about to recess, and i just want to say to my colleague from florida, who is my friend, that i have optimism and i have that faith in our country as well. and i think it's interesting that the stock market, the dow jones, has surged 243 points -- i just checked it a umcan of minutes ago -- i just checked it a couple of minutes ago -- on just the rumors that the debt ceiling will be lifted and we will not go through this crisis. but i'm told at the other end of the capitol, the house of representatives is going to have difficulty in getting any agreement to stop the shutdown of the government and pass a continuing appropriations bill. and so here we are back in the soup again. and if we do just a short-term
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debt extension, debt ceiling lifting, then for however long it is -- five, six weeks -- then come thanksgiving, we're going to be back in the soup again. there's got to be a change in attitude, and the attitude has got to be, i respect the other fella's point of view, i respect his difference of opinion. now let's work it out together. and it's only until then is when we're going to solve this problem. madam president, i yield the floor. the presiding officer: under the previous order, the senate stands in recess subject to the stands in recess subject to the >> as you heard the senate is now in recess subject to the call of the chair. just a short time ago senators
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passed by unanimous consent the bill funding military death benefits that the house passed yesterday. it now goes to the president for his signature. when lawmakers return we expect more debate on the government shutdown and the debt ceiling. live coverage on c-span2. many of you are using social media to offer reaction to the house and senate impasse over the government shutdown. anytime you want, congress will keep their -- >> you can tweak your remarks at c-span chat. treasury secretary jack lew appear before the senate finance committee to talk about the nation's debt limit which will be reached next thursday. and the possible effects of failing to reach an agreement on
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increasing the them. he testified for about an hour and 45 minutes. >> here we go. the committee will come to order. on gender 27, 1838, a young state legislator named abraham lincoln spoke before a gathering in springfield, illinois. at a time, america was deeply divided nation and lincoln warned that the greatest threats to the young democracy were internal. he said quote, if danger ever reaches us, it must spring up
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amongst us. it cannot come from abroad. if destruction be our lot, we must ourselves be its author and finisher. as a nation of freemen we must live through all time or die by suicide. the actions of the past few weeks, the extremism of a small core of members in the house of representatives, have crippled congress and put our nation on a very perilous path. for more than 200 years, the united states has been true to its word, honored its obligations and paid its debts. yet today, a small group of hard-liners is using our economy as a bargaining chip to repeal the affordable care act. let me be clear. we are not going to let that happen. the affordable care act is the law of the land. it is not going to be dismantled in this budget fight. this issue is not up for debate. our committee wrote the
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affordable care act. i'm always open to this committee working together to strengthen the law to better serve the american people. but as the president said, we cannot negotiate under the threat of default on the nation's bills. before any debate, before any deliberation, we need to reopen the government and pay the nation's bills, no strings attached. then we need to work together, return to regular order. we must address the nation's long-term budget challenges, working together, including entitlement and tax reform. but right now we need to prevent another self-inflicted wound to america's economy. that is what defaulting on the debt is, a self-inflicted wound with global consequences. the deadline is fast approaching. in seven days the united states treasure will have exhausted all extraordinary measures to stay under the debt limit. in seven days, the united states will be at the risk of
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defaulting on payments. the united states of america, the richest, most powerful nation in the world, will be forced to look for loose change in the sofa in order to pay its bills. while the government shutdown has been disrupted, a default would be a financial heart attack. it would have widespread, long-term economic consequences. financial markets are already showing serious signs of stress. the dow has dropped more than 800 points over the last three weeks. and the one month treasury bill rate has risen to its highest level since the 2008 fiscal crisis. if the debt ceiling is breached, the government would immediately have to slash federal spending by 20-30%, driving the nation back into a recession. the pain would be felt across every sector of society. social security and medicare would be cut, veterans benefits slashed, funding for highways
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would be hit. every government program would be devastated by deep cuts. families would feel it first and with dramatic drops in their retirement savings. jobs would be lost. home values would plunge. interest rates on mortgages and student loans would soar. now, summit said we can avoid default by prioritizing u.s. payments, paying bondholders and interest on the debt. but they fail to mention this scheme would force treasury to pick and choose which programs to pay, forcing vital programs like social security and medicare to compete for funding. this id is just irrational. a default would have a catastrophic impact on the global economy as well. jim yong kim, the president of the world bank warned a default would have dire consequences for the world economy. christine lagarde, the managing director of the international monetary fund said it is mission critical that the debt limit be resolved as soon as possible.
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this is serious. the whole world is watching. our actions here in the next couple of days will have global implications. we are the most important economy in the world. the dollar is the world's reserve currency. our treasury bonds are the backbone of the international financial system. a default would put the global economy in chaos. of that there is no doubt. last week, treasury warned us that a default would cause a quote recession that could equity events of 2008 or worse. have people here forgotten what happened in 2008? the collapse of lehman brothers set off a financial earthquake. markets plunged. unemployment surged. america's confidence was shattered to the core. the 2008 crisis of ended lives
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across the country. the aftermath of which can still be felt today. we cannot let that happen. we have a responsibility to avoid another economic disaster. our leadership, our resolve, will be tested in the coming days. we, all of us here in this room, we have an opportunity to pull america back from the brink. earlier this week i introduced a bill with leader reid that would get us past this stalemate. the bill extends the nation's borrowing authority through the end of 2014, passed the midterm elections. it is a clean increase without any amendments. it simply allows the united states to pay its bills and avoid a catastrophic default. this is only a short-term solution, but it will help pull us back from the edge. it will allow us all here to pause, take a deep breath and once again try and come together to move forward. i've been here in the senate for close to 35 years, in congress
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going on 39. i have seen my fair share of partisan fights. but never in my mind have icing washington so angry, so gridlocked, so broken. and it doesn't have to be that way. i know the public might find it hard to believe, but there are some very reasonable people here in congress. there are many who want to do what is right. there are many who want to work together to conduct the business of our nation. i would say to them, to all my colleagues, now is the time. now is the time for congress to stop the fighting old battles. now is a design for congress to come together and do what is right for our nation. and now is the time for congress to come together and reopen the government and the full america's financial obligations. i begin my remarks with a quote from president lincoln and thought it appropriate to conclude with another one. lincoln once said, and i quote him, i am a firm believer in the people. if given the truth, they can be
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depended upon to meet any national crisis. and that is why we're here today. we need to give the american people the truth, the real facts. only then, when everyone understands the real risks at hand, the facts and the truth, will be able to meet this national crisis. senator hatch. >> mr. chairman, i want to thank you for holding today's hearing on the debt limit. i also want to welcome secretary lew to this hearing today. we appreciate your time for coming. during debate over a debt limit increase in 2006, then-senator obama stated that the fact that we are here today to debate raising america's debt limit is a sign of leadership failure. leadership, he said means that the buck stops here. instead, washington is shifting the burden of bad choices today onto the backs of our children and grandchildren.
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america has a debt problem and a failure of leadership. americans deserve better. secretary lew, on the day then-senator obama spoke about our debt problem, our gross debt was $8.3 trillion. it is now more than twice that, currently standing at $16.7 trillion. that represents 107% of the size of our economy. and, as the congressional budget office has made clear, this poses large economic and fiscal risks. during that same 2006 debt limit debate, then-senator biden said, my vote against the debt limit increase cannot change the fact that we have incurred this debt already, and will no doubt incur more. it is a statement that i refuse to be associated with the policies that brought us to this point. what a difference in attitude there has been since then.
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now president obama and vice president biden preside over an administration that tells us that raising the debt limit, in your words secretary lew, simply allows us to pay our bills. secretary lew, you have also publicly stated that only congress has the power to lift the debt limit. now, while it is ostensibly true that congress has the power to raise the debt limit, there will be no increase if the president does not agree. at the same time, despite your public statements to the contrary, it is not true that raising the limit has only to do with spending congress already approved. this line of argument is based on a premise that congress makes spending decisions unilaterally, and that the executive branch plays no role in the process. that premise is simply false. no amount of spending can be enacted without the president signing it into law. furthermore, while president obama's budgets have not been
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well received by even the democrats in congress, the president has, traditionally, been deeply involved in congress's efforts to set spending priorities. the administration also issues statements of administration policy and veto threats on spending bills and other pieces of legislation. presidents work with congress all the time to enact their domestic agendas. we all remember how president obama unveiled and pushed his trillion dollar stimulus through a democratic congress that he then signed into law. in addition, this president has made unilateral decisions, with no input from congress, that have had an impact on federal spending. for example, there was the decision to delay the employer mandate under obamacare, which cbo tells us will add an additional $12 billion to our deficit. congress never voted on the delay. it was a unilateral choice made through rulemaking at the treasury department. so, in short, the commonly
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repeated notion that questions surrounding spending and the debt limit are congress's and congress's alone to answer is, to put it mildly, a case of false advertising on the part of the obama administration. there have been several other instances of false advertising from the administration concerning the debt limit. one is the president's claim that non-budget items have never before been attached to the debt limit increase, a claim to which a fact checker at the washington post assigned the maximum four pinocchios. as we have on the chart over here. in fact, of the 53 debt limit increases passed since 1978, under both republican and democratic presidents, only 26 were clean. another is that, in 2011, we entered some sort of brave new world in which, for the first time in recent history, people were commenting on an inability of treasury to make timely payment on incoming due
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obligations. if you would just go back to president clinton's administration and read some press conferences held by then-treasury secretary rubin, you will see that this claim is also false. mr. chairman, i ask permission to enter a reprint of a press conference in 1995 with then treasury secretary rubin and then white house chief of staff panetta that supports this position, along with an associated article from the new york times. >> without objection >> now, secretary lew, i hope that, during today's hearing, we do not simply regress into comparative recollections of history. what is at stake is too big for that. the issue we face is yet another debt limit increase. there have been seven debt limit increases since the president came into office, collectively raising the limit from $11.3 trillion to the current $16.7 trillion, a cumulative increase of $5.4 trillion. when talking about the future
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increases in the debt limit, all the administration will say is that one, they want a clean increase, and two, they refuse to negotiate. we don't know what they mean by a clean increase. we don't even know how much of an increase they want or for how long. apparently, even making such desires known would constitute a negotiation. this posture is neither productive nor helpful toward resolving the current impasse over the debt limit. essentially, what the administration appears to be saying is that it is entirely up to congress to increase the debt limit and to decide how much and for how long. this, of course, raises more questions than it answers. for instance, does it mean that, if congress chooses to enact a two-week clean debt limit increase, the president will sign it? according to the administration's public statements, because congress is solely responsible for increasing the debt limit, such a hypothetical stop-gap would be
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fine if that's what congress chose to do. yet, somehow, i don't think that's what the president is looking for when it comes to the debt limit. in just the past couple of days, the president has expressed willingness to entertain a short-term increase in the limit, which sounds like a willingness to negotiate terms. sadly, the president's statements are still short on details. secretary lew, the lack of real engagement on the part of the administration is just one of the elements of the current debt limit debate that i find disconcerting. it is also disconcerting to have administration officials, including you, publicly questioning sentiments of americans and financial market participants, and suggesting that people may be too calm in an apparent effort to whip up uncertainty in the markets. it is disconcerting that you have suggested that payments of social security benefits to retirees and disabled american workers are at risk, especially since you are a trustee of the social security trust funds. it is disconcerting that
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administration officials are sounding alarms of emerging risks to financial stability arising from the debt limit impasse, while, at the same time, the financial stability oversight council, which you chair, has been silent and refuses to tell the american people how it would respond to these risks. finally, it is disconcerting that the administration refuses, in the context of the debt limit, to even have a conversation with anyone concerning our unsustainable entitlement programs, which everyone agrees are the main drivers of our debt. the president has, thus far, refused to seriously discuss structural entitlement reforms without assurance that he first gets another tax hike. more often than not, what we hear from the administration on entitlements is a series of disclaimers as to what reform proposals they will no longer consider. and, that list seems to get larger every day. the biggest question i have is, if the obama administration
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won't negotiate on entitlements in the context of the debt limit, when will they negotiate on entitlements? secretary lew, i will remind you that i have put forth five modest reform proposals for our health entitlement spending, and personally gave them to the president earlier this year. you have copies of these proposals yourself. yet, to this day, i have yet to hear a response. i cannot even get mere conversations from the administration about my proposals that i offered in good faith, well before the debt limit was even an issue. most recently, the senate majority leader has introduced a clean debt limit bill that would increase the limit until january 1, 2015, which will likely raise the limit by $1.3 trillion or more. that, apparently, is the position of the senate democratic leadership, but is somewhat inconsistent with the president's recent willingness
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to accept a short-term increase in the debt limit. as you can see, secretary lew, we have a lot to discuss today. my hope is that, during the course of this hearing, we can get a real sense of where the administration wants to go with regard to the debt limit. i also hope that we can get past the arguments that have thus far dominated the administration's rhetoric regarding this issue. our nation's debt is now larger as a share of our economy than at any time since world war ii. despite the rhetoric of the administration, our growing debt is not solely the result of decisions made by congress. it is not all due to the financial crisis. and, it is not all the result of tax relief enacted under the bush administration. instead, it is a problem that all of us, both congress and the executive branch, need to deal with. and, the only way to responsibly deal with it is to confront our unsustainable entitlement spending, which will require the administration to do something
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it is now refusing to do, which is negotiate. secretary lew, as president obama said in 2006 regarding the debt limit, americans deserve better. i want to thank you, mr. chairman, and appreciate you holding this hearing. >> thank you, senator very much. before the second of courage begins i would like to remind members and thank you very much for the full attendance that we have to be very efficient with our questions and answers. the secretary has an engagement in just a couple three minutes after 930 time back so i urge us all to respect others as requested so we all have a chance in this sector has a chance to answer questions. our questions. mr. secretary. >> thank you, mr. chairman, chairman baucus, ranking member hatch, and members of the committee. i appreciate the opportunity to hear the bearded and appreciate the opportunity to talk about
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the potential impact of congress failure to increase the debt limit. commerce has an important choice. congress on has the power to act to make sure the full faith and credit of the united states is never called into question. no longer seem to a 24 years of american history as allow our country to default and it's my sincere hope is congress will not be the first. among the risks that we control, the biggest threat to sustained growth in our economy is recurrence of manufactured crises in washington and self-inflicted wounds. unfortunately today we face a manufactured political crisis that is beginning to deliver an unnecessary blow to our economy right at a time when the united states economy, the american people have painstakingly fought back from the worst recession since the great depression. in addition to the economic costs of the shutdown, the uncertainty around raising the debt limit is beginning to stress financial markets. at our auction of four-week
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treasury bills on tuesday the interest rate nearly tripled relative to the prior week's auction and it reached the highest level since october 2008. in measures of expected volatility in the stock market have risen to the highest levels of the year. the only way to avoid inflicting further damage to our economy is for congress to act. i know from my conversations with a wide range of business leaders representing industries from retail to manufacturing and banking that this is a paramount concern for them. that's what it's important for congress to reopen the government, to raise the debt ceiling and then to work with the president to address our fiscal challenges in a balanced fashion. republican and democratic presidents, treasury secretaries alike, have universally understood the importance of protecting one of our most precious assets, the full faith and credit of the united states. president reagan wrote to congress in 1983, and i quote,
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this country now possesses the strongest credit in the world. the full consequences of a default or even the series prospect of default by the united states are impossible to predict and awesome to contemplate. denigration of the full faith and credit of the united states would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets, closed quote. if congress fails to meet its responsibility, it could deeply damaged financial markets, the ongoing economic recovery, and the jobs and savings of millions of americans. i have a responsibility to be transparent with congress and the american people about these risks. i think would be a grave mistake to discount or dismiss them. for these reasons i've repeatedly urged congress to take action immediately so we can honor all of our countries past commitments. the treasury department has regularly updated congress over the course of the last five months as new information has
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become available about when we would exhaust our extraordinary measures. in addition, treasury has provided information about what our cash balances will be when we exhaust our extraordinary measures. as our forecasts have changed i consistently provided updates in order to give congress the best information about the urgency with which they should act. and last month i met with the full membership of this committee to discuss these issues. treasury continues to projected that the extraordinary measures will be exhausted no later than october 17, 2013. at which point the federal government will have run out of borrowing authority. at that point will be left to meet our countries commitments with only the cash on hand and any incoming revenues placing our economy in a dangerous position. if we have insufficient cash on hand it would be impossible for the united states to meet all of its obligations. including social security and medicare benefits, payments to our military and veterans, and
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contracts with private suppliers. for the first time in our history. at the same time we are relying on investors from all over the world to continue to hold u.s. bond. every week we roll over approximately $100 billion in u.s. bills. if u.s. bondholders decided that they wanted to be repaid rather than continuing to roll over their investment, we did unexpectedly dissipate our entire cash balance. let me be clear, trying to time the debt limit increase to the last minute could be very dangerous. if congress does not act and the united states simply cannot pay its bills, the repercussions would be serious. raising the debt limit is congress' responsibility because congress and congress alone has the power to set the maximum amount the government can borrow to meet its financial obligations. some in congress have suggested that raising the debt limit should be paired with a company spending cuts and reforms. i have repeatedly noted that the debt limit has nothing to do with new spending. spending. it has to do with spending that
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congress has already approved and bills that have already been incurred. failing to raise the debt limit would not make these bills disappear. the president remains willing to negotiate over the future direction of fiscal policy but he will not negotiate over whether the united states should pay its bills. certain members of the house and senate also believe it's possible to protect our economy by simply paying only the interest on our debts while stopping or delaying payments on a number of our other legal commitments. how can the united states choose whether to send social security checks to seniors or pay benefits to veterans? how can the united states choose whether to provide children with food assistance or meet our obligations for medicare providers? the united states should not be put in the position of making such perils choices. there is no way of knowing the arrival global damage such an approach would have on our economy and financial markets. leaders have a responsibility to make our economy stronger, not to create manufactured crises
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that inflict damage. 1987 president reagan addressing a debt limit and past delivered a message that is applicable to us today. this brinksmanship threatens the holders of government bonds and those who rely on social security and veterans benefits. interest rates would skyrocket, instability would occur in financial markets, and the federal deficit would soar. the united states has a special responsibility to itself into the world to meet its obligations. the very last thing the u.s. economy needs now is a fight over whether we raise the debt ceiling. it's not whether we face series of challenges both domestically and internationally that require our full attention, and not women of the kind of damage a financial and economic crisis can cause. thank you, and i look forward to answering your questions. >> thank you secretary but i'd like to focus all of it on a concept that some suggest is a way out of this problem in which some suggest is feasible. , and i disagree with. it's called prioritization.
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you touched on it. could you just briefly tell us what decisions you have to make as treasury secretary, assuming interest was paid on the debt, and you then have to choose which other obligations had to be paid? i know you can't tell us which ones, nor should you tell us, social security, medicare, military, farm program, whatnot. but if you could just go through the process and describe what the actual legal and administrative problems and consequences would be, and include how much total that would be. my understand it's about 70-80% of those programs could be paid, if they are all paid, and also what effect it would have on the gross domestic product, that kind of a cut. just walk us through difficulties please. >> mr. chairman, let me start by saying what i think should be
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obvious, that if we don't have enough cash to pay all our bills we will be failing to meet our obligations, and under any scenario, we will be defaulting on obligations. there is no plan, other than raising the debt limit, that permits us to meet all of our obligations. when questions are raised about prioritization, the first question is interest and principal on the debt. ..
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>> mr. chairman, i don't know how you could choose between social security and veterans' benefits, medicare and food assistance. these are obligations we have made. we wouldn't have the money necessarily to pay our troops in full. we wouldn't have the money to pay a veteran of the benefits in full. our systems were not designed to not pay our bills. our systems were designed to pay our bills. the legal issues are many. i do not know how you could make the decisions. i do not think the legal authorities are clear at all and i do not think the administrative process would permit the system to work. we right roughly eighty million checks a month. the systems are automated to pay because for 220 years the policy of congress and every president has been we pay our bills. you cannot go into the system and easily make from a some things and not other things. they were not designed that way
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because it was never the policy of this government to be in the position we would have to be in if we couldn't pay our bills. >> it is my understanding as well that to some degree what the obligations are, october 23rd, the summit, at the end of the month, this month, major medicare bills to and the revenues are sketchy, lumpy that come in, unanticipated amounts. go over that please. >> very much the case, we have estimates. if these estimates are wrong there is the real risk of miscalculation and i would just notes even in the period of time that i have been keeping congress informed we have seen swings in the normal course of things, $20 billion in terms of our estimate of what the cash on hand would be and that is not because anyone did anything wrong but because quarterly tax
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receipts were not exactly where they estimated to be. i would remind everyone we are in an unusual position with the government shutdown, not having economic consequences we are just beginning to understand. all the revenue projections we based our analysis on were based on a world where the government was functioning and where all the services related to government activity were happening so didn't take into account any layoffs that might occur, didn't account for any reduction in payroll or payroll taxes so i have to assume the estimates from before the shutdown are likely not to be an accurate predictor of exactly where we are. >> and what about computers? >> mr. chairman, i have to tell you i don't believe there is a way to pick and choose on a broad basis. the system was not designed to be turned off selectively. anyone who thinks it can be done just doesn't know the architecture of our multiple
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payment systems that are very complex, designed properly to pay our bills, they were not designed to not pay our bills. >> as far as prioritization it just doesn't work. >> prioritization is default by another name. saying the we will default on some subset of our obligations but we are still, by definition of we don't have enough money to pay our bills we will be in default in our obligation. >> thank you, mr. chairman. i want to be clear about the administration's position on the debt limit. as i understand it the position is the president will only accept a clean debt limit hike where no other accompanying policy or fiscal consideration have been attached to it. i have asked you repeatedly how much of the debt limit increase you would like and for how long and you have responded it is up to congress. i believe the administration's position is unfortunate because it is clear the we have a problem and the driver of the
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desk is unreasonable, unsustainable spending in the entitlement programs. i believe we can and should use this as an opportunity to address these problems. i personally as i mentioned offered five modest bipartisan proposals on entitlement reform to the president earlier this year and received copies and i had heard no response to that and i sincerely did that, nevertheless the administration is entitled to its opinion and positions so i just want to be clear concerning the debt limit. as long as there is nothing attached to the debt limit increase the administration will say nothing more about including its preferred outcomes, in terms of how much of an increase and for how long, is my understanding correct or do you wish to give me your preferences how big debt limit increase you would like to have and for how long you would like it so it least we can begin discussions and negotiations on this critical issue? >> we'll discuss this and number
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of times and we have corresponding number of times. i wrote to you last week a few days ago stating what our view is. our view is this economy would benefit from more certainty and less brinksmanship so the longer the period of time is the better for the economy. it is really congress's decision how often it wants to vote on the debt limit. i believe more certainty is better. the senate leader and chairman put forward a proposal -- >> all i am asking is how much do you want and for hall long? how much do you want us to raise and how long? >> a question of how long, i'm answering as clearly as i can, as long as congress is prepared to extend is the best. >> the president tried to be clear in his statement in recent days that if congress passes
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something shorter, he is not looking for there to be a crisis here, but dealing with it, the better solution is to go longer so we tried to be very clear and everyone knows the numbers associated with different periods of time. >> it is not clear to me. the reason the nonpartisan congressional budget office make a number of things abundantly clear. first between 2009, and 2012, the federal government recorded the largest deficit since 1946 crossing federal debt to soar to share of the economy to an amount higher than at any point in u.s. history except a brief peer go during world war ii. it stands at 107% of gdp. the package unconsidered -- unsustainable bringing us to this fiscal crisis. and a major health care programs include not just obamacare that medicaid and medicare as well.
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and trust funds and health entitlement programs. and all i hear from the administration is negotiations can only proceed if the president is guaranteed, the only spending restraint is turned off. when it comes to some much as discussing solutions to or entitlement spending problem, all i hear is negotiations can only proceed first week as a continuing resolution and clean debt limit increase. what does it take beyond a guarantee by congressional democrats that they get another tax hike or that the sequestered be undone against the administration at the table to talk about entitlement reform such as the ones i propose in which it has been met with total silence from the administration.
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is it reasonable to save their are no negotiations unless there's another tax hike when we know this very day disabled american workers face the benefit of 20% or more under current law when the disability claims fund is exhausted in 2016 or earlier. >> the record is clear that the president has negotiated and wanted to negotiate and remains anxious to negotiate on a bipartisan basis to have a fair and balanced approach to dealing with our fiscal -- >> not clear to me. >> it has been on the verge of agreement was until was not acceptable to republicans in congress. he was prepared to do very hard to things. was ready to have an agreement twice in 2011 at the end of last year. he put in his budget very tough policies, policies many democrats on this committee find very challenging because he wanted to make clear he was looking for a balanced approach to entitlement reform and tax reform to settle our fiscal matters in a sensible way for the medium and long-term.
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the president's record on being willing to negotiate is clear. i would make one comment briefly on the trajectory of our deficit. when the president took office in january of 2009 we were in the middle of the worst recession since the great depression, in the middle of two wars and added deficit that was 9% of our economy. we have cut that in half and we are making progress. we have more to do but i don't think it is fair to say the we are in the same place we were. we have made tremendous progress. >> thank you, mr. chairman. it seems to me in the event of a default or near default, the dominoes are going to fall fast and hard and those here early on will be older people who depend on their own retirement savings to get by. these are the older people who saw much of their life savings evaporates during the recession and are struggling just to get those private savings in effect
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back to the water line where they are. be as specific as you can with respect to what default or near default would mean for those seniors who depend on their private savings? >> i can only begin to imagine what it would mean to a retired american who relies on social security as their major or sole source of income if we had to tell them they're check was going to be late. i remember my late mother lived on her social security check. many of us have relatives who lived on their social security check. if the check to come. if they didn't have the ability to call someone to help them out they were in trouble so anyone who thinks anything short of the fault has never experienced what it means to live on social security. turning to medicare. private savings especially -- >> i share your view about those others but i think the public
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has heard you give some comments with respect to mortgages. i am concerned aboutt fell quit
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in value it is unfair to have a menu affected crisis with the real-life impact on working americans and retirees who ought to be able to worry about market risks, not government policy risks. >> let me ask about the effect of default. budget sequestration is not exactly an ideal instrument, not exactly perfect targeted for driving down the budget deficit. but it has produced budget savings that actually a crew to the benefit of the american taxpayer. in the event of a default or near default is it fair to say that some of those budget savings would be eaten up to pay higher interest costs, substantial amounts of which
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would go to foreign governments and other foreign creditors? >> we injustice week for the bills that mature at the end october the rates have almost tripled over the last week. we still have access to the credit market but it is more expensive and for no reason. it could be resolved by just settling this issue and making it clear that the debt limit will not be breached and we won't have any problems. >> what is troubling to me is after the american taxpayer has gone through something of a painful process and you see these savings, in the fact the result of the default would produce higher interest payments and the effect transfer of american wealth from hartack spears, some of that would go to foreign creditors. >> i would add the high interest rates also flowed through the economy and higher mortgage rates and higher student loan
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interest rate so the costs have multiple levels of impact on real people. >> thank you, mr. chairman. >> thank you, senator grassley. >> majority leader read, clean debt limit increase into the beginning of 2015 would likely be an increase of $1.3 trillion but my understanding of the decision is it is leaving the debt limit increase entirely of to congress, you won't negotiate, require clean debt limit increase and will say nothing about its negotiating preferences regarding how long or how much the debt limit increase is desired. that being the case if harry reid's clean debt limit bill were mandated raise limits for one month and the amended bill were passed through congress than the president will sign assume. is that correct? >> i would have to see a bill
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and look at it to say what he wouldn't sign that the president made clear he thinks dealing with this for a long time would be good for the economy but he did not rule out doing something shorter if that is what congress does. we have been very clear what we think the right thing to do is. >> both you and president obama have repeated the talking point that negotiating reduction policies on the debt ceiling increase is unprecedented, the debt limit has been used in the past as a means to enact deficit-reduction policies, congressional research service since 1978, congress has voted to raise the debt ceiling 53 times, 27 of those, 51% the debt limit increase was tied to other reforms. i assume you are aware that more
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often than not, the debt ceiling is raised with other policy or reforms. if you are aware of that history, why do you and president obama continue to use the talking point that negotiating on a debt limit bill is unprecedented when the facts demonstrate otherwise? >> i don't think that is an accurate version of history and certainly not what i recall having lived through many budget debate over the last 35 years. the last 9 budget agreement only three involved the debt limit so it is not the case that most budget agreement involves the debt limit. if you look at the budget agreement that did involve the debt limit, several of them, the debt limit was just added onto a bill, it was not driving the debate. what i think change in 2011 was the affirmative case was made in 2011 that if a certain faction and i am not saying it is the people in this room but if a
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certain faction in the house did not get its way they would prefer default over a compromise they found unsatisfactory. that is different. is different. we cannot have the debt limit be something that is a threat to the economy unless policy concessions are made. that is not how our democratic system works. we cannot do that. >> before i go on to the next question at least you can't say that it is unprecedented to have negotiations and reforms tied to a debt increase. >> i never said was unprecedented. did increase has always been a hard vote. since 1917 this country has been working to turn into a more ministerial vote. congress use to vote on every bond issue. the debt limit was put in place to reduce the number of times congress has to vote on the debt. in the 1980s when i was working with house speaker we tried to
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turn into an automatic vote so there wouldn't have to be a vote on the debt limit. two years ago senator mcconnell put in a mechanism to make it easier to vote on the debt limit. it has always been a hard vote. the question is will it be used as a threat to the economy and that can't be. >> secretary jack lew, the president made clear if we pass a clean c r and a clean debt limit extension, negotiate where we need to negotiate is obvious. if you look at long-term protection, spend on health care entitlements, demands our intention in the next 25 years. it is a percentage of gdp projected to double nearly. if i ask you if the president is willing to negotiate on health care entitlements i think you have already said what the president put in the budget, you are probably going to cite the president's budget, you already done that.
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i don't consider that negotiation. i consider a restatement of your position, you're willing to give serious consideration to other ideas, senator hatch has made numerous serious proposals on health care entitlements. i am told the message of the 2012 election would be democrats no longer have to negotiate on health issues. can you convince me that that is wrong? >> can he answer the question? >> about ten second. >> the president's budget does address your recent settlement reform. he has been willing to work on a bipartisan basis do things that are unpopular and democratic side and is looking for a partner to work with who is willing to have some give-and-take, not just one way. >> thank you, mr. chairman and thank you for coming. this hearing is much needed. if it has a purpose is to deal with the debt ceiling the nighters. the debt ceiling deniers try to
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claim that default won't be a big deal, middle-class families won't be heard, we with and can choose which bills take prioritization. debt ceiling denies needed dose of debt ceiling reality and you have given them that today. you have said or i think in just about these words you said prioritization is default by another name and prioritization is extremely difficult as you said. do we pay foreign debts or veterans benefits? do we make sure social security benefits go out or pay medicare. do we pay for education. american people don't want that. they would want to pass a clean debt ceiling bill and avoid those awful choices but i would like to talk about the other -- one of the debt ceiling deniers i read in the new york times, congressman brown, also said much of what he learned in medical school where lies the came from in his words the pits of hell. if we a people and -- letting
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people like this beat us, god save america. i would like to deal with the second issue. which is the timing. in my view we are like a blindfolded man walking towards a cliff and if we keep walking in that direction, very soon we will fall off. we may fall off on october 16th, we may fall off on october 17th, we may fall on oct. 20 fifth or november first but we will fall off and the most interesting part, the most important point is we don't know which day we will falloffs. of the markets are mystical. make it a day or two before october 17th, the u.s. is going to default, anticipate that, treasuries go down, interest rates go up, much of our financial system freezes and we're back where we were in 2008 when aig failed. i want to ask this question. to be clear, isn't there a risk
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almost every single day, starting around october 17th, even perhaps a day or two earlier, getting worse, can't tell when each day after that we won't have enough money to pay our bills and default could occur. even if you laid out the most meticulous plan in the world. >> i have been trying to be as transparent as possible for several months because i very much fear miscalculation is something that could lead to an unintended but severe consequence. since august, i have been very clear, we are already in overtime. we hit the debt limit in may. we have been using extraordinary measures. we call the extraordinary measures that everyone is in their infinite. they are not infinite. i want in august we were going to run out of extraordinary measures in the middle of october and even went a step further which mostly has never been done and said we are going
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to have roughly $50 billion on cash. a month later based on year end tax receipts and expenditures i updated it and said no later than october 17th we would run out of borrowing capacity and instead of $50 billion we would have roughly $30 billion. i think that should indicate that what i said in each of these correspondentss is true. impossible to predict with accuracy. we are talking enormous variations in day to day expenses and economic activity which generates tax revenue. it is impossible to predict with accuracy. it is typical to keep roughly $50 billion in reserve at all times just as a cushion against the unknown. when you talk about having less than $50 billion it is a dangerous place to be. that is why congress needs to raise the debt limit's sooner rather than later. >> to avoid a potential cataclysms, pass a clean debt ceiling now.
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do not delay and say we can wait until what eve of the seventeenth for the nineteenth or october 40 first. is that right? >> i must say there is a parlor square in washington when at last minute, you can't do that with the debt limit. if you look for the last minute and make a mistake you have done serious damage to the u.s. economy, to the world economy. is not responsible directly. >> would you agree with my analogy blindfolded man walking toward the cliff, we don't know what date we will fall-off but if we keep watching we will, pretty accurate? >> i tried to describe in my own words. >> thank you, mr. chairman. >> thank you. senator greenwald. >> you indicated in your remarks that we face a terrible threat to the economy from not manufactured crisis. i understand the fact that the issue of whether the federal government's borrowing limit
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should be raised is problematic and creates serious concerns with regard to our economy but the fact is we do face a debt crisis. not -- i guess it is manufactured over decades now but we face a real debt crisis and as we hear the discussion about whether the united states is going to lose good faith and credit ultimately will go into default i think the real crisis is the fact default, the one we are screaming toward because of our refusal to engage as congress and the president with regard to reforming our failed in title and system, reforming our failed tax policy in this country and dealing with the real debt crisis that we face. senator schumer's comment about the blind man walking toward the cliff is even more appropriate with regard to the debt crisis that we face with 16, almost
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$17 trillion debt. so my question to you is don't you believe that the long-term trajectory of the debt gives our economy a greater threat and gives investors even more concern in terms of their confidence about the ability of the united states to avoid default? >> we clearly have long-term challenges but the financial markets and when you talk to financial policymakers around the world they actually see we have made a lot of progress in the last few years. more to do in title and reform and tax reform but we have taken the deficit that was 9% gdp and brought it in half to 4% gdp. if anything we're getting criticized around the world for doing too much deficit reduction too fast because they want more growth. we should be dealing on a bipartisan basis and we talked about this, sensible balanced approach for medium and long-term reforms and i would be
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engaged in that conversation. >> very progress you're talking about occurred as a result of significant tax increases, the debt ceiling compromise that was reached with the budget control act. perfect is we have not dealt in that compromise with discretionary spending almost entirely. we have not dealt with entitlements which the administration seems to say are off the table and we have even more demand for greater tax hikes and that is what the negotiations we want to engage in are about. >> the president has engaged in multiple locations. i have been part of those negotiations. we very much believe that a balanced approach where you do in title and reform and tax reform would be good for the country. we tried to in 2011, we tried in 2012. we are ready to try again. the president said when we take away the threat of economic disaster he is ready to engage.
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if i heard him correctly in his press conference he said he would pay for dinner. he is willing to talk, wants to talk but it can't be with the u.s. economy being threatened, one small part of congress doesn't get its way. >> we need another $1 trillion of debt authorize before we can even discuss whether to start reforming entitlements, whether to start reforming the tax code? >> senator, what we believe, the government needs to open, congress needs to open the government and congress needs to make it possible to pay our bills and we need to engage and we are ready to do that. >> to conclude my questioning, back to the issue of our long-term debt and the threat it poses to the economy are you telling me those fears have been allayed? >> what i tried to say and i hope i wasn't confusing, there is a challenge to deal with in the medium and long term. is not the same as the crisis which is what happens if you
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fail to act on the debt limit in the next short period of time. i would very much like to do it sooner rather than later. it would have been better for the country if we had been able to complete the negotiation where the president and speaker were very close until house republicans said they wouldn't vote for it. we would love to be a place where we were talking about a sensible alternative to these mindless across-the-board cuts. we have been very clear about that but it can't be with the threat the government is shut down and we're going to default on our bills. that is not the way to engage in bipartisan negotiation. ..

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